Two proteins, barnase, the extracellular ribonuclease of Bacillus amyloliquefaciens, and barstar, its intracellular inhibitor, are used as a model system for the study of protein folding and protein-protein interactions. Barnase is one of a homologous group of ribonucleases occurring in both prokaryotes and eukaryotes. Recombinant DNA techniques are being applied with three major aims: (1) to facilitate production of wild type and mutant proteins; (2) to examine the structural and control sequences of the genes; and (3) to make specific changes in the sequences to test theories of folding and to probe the barnase-barstar interaction. Both proteins can now be obtained from recombinant genes in E. coli where expression of barstar counters the lethal effect of barnase expression. The structures of both proteins and their complex are known, barnase at 1.5 Angstrom resolution. Crystal structures of several barnase-barstar pairs having complementary mutations in the interface, obtained by an in vivo selective technique, have been solved, providing insight into the mechanisms that determine the strength of the bond. Barstar also inhibits a group of RNases from Streptomyces strains. These enzymes are distantly related to barnase with a sequence identity of only 25%. Among the four such enzymes in hand, identities range from 40% to 70%. Cloned and expressed in E.coli with the aid of barstar, several of these have been well characterized. The genes for barstar homologs from three other strains of B. amyloliquefaciens plus one, the yrdF gene from B. subtilis 168 and another, Sti from S. erythreus have been cloned and their products found to cross react with barnase. Cloning of the Sti gene required the use of phage display technology. A phage display system has been developed for selection of varieties or homologs of barstar that bind tightly to barnase or its mutants. Procedures have been developed for total synthesis of the barstar gene with randomization of selected hydrophobic core residues with a multiplicity (the number of independently randomized sequences) on the order of 10exp9. From a library for which a compact clump of eight core residues were randomized ( to L, I, V, M or F) 30 clones producing functional barstars were obtained, 21 of which provided yields comparable to the wild type. At only one position in this group, at F74, was the wild type residue required. From a larger library with all 22 of the core residues similarly randomized, we have found fewer functional barstars but in this larger context no wild type residues are irreplaceable. Is the limited number of basic protein folds found in nature an historical accident of evolution or is it due to some fundamental geometric limitation? We are currently trying to answer this question by using ribosome display to search for a well folded protein produced by a synthetic gene library designed to yield a novel tertiary structure made up of elements of secondary structure taken from barnase and barstar but with a randomized hydrophobic core.